ITR Filing 2025: For the first time, the Income Tax Department has included social media influencers as a separate category in the tax system. Now the influencers will have to use the new profession code 16021 while filing tax returns. This code will apply to those who earn by promoting brands and products on social media platforms.
This change has been made in ITR Utilities released for FY 2024-25 (Assessment Year 2025-26). It will be mandatory to fill this code for ITR-3 or ITR-4 (smooth) filling influencers. Both these forms are for self-promoted professionals and small businessmen.
Which form should be filled?
Social media influencers, bloggers, online coaches and digital gig workers have two options to file returns. They can show their real income and expenses or opt for presumptive taxation.
There is no need to keep a widespread account on choosing a prize taxation. Under this, a certain part of the total earnings is considered to be a taxable income.
Profession or Business, Confusion intact
Tax experts say that there is still ambiguity about the classification of influencer profession. The Rule 6F of the Income Tax Act mentions some notified professions, but the content creation is not included in it. In such a situation, the audit limit and which section will be used on considering the work of the influencer as ‘profession’, it can be confused about it.
If it is considered a profession, the influencers will get the benefit of expenditure and deduction under section 44ADA. At the same time, if it is considered a business then section 44AD will be applicable.
ITR filing process
Under the new rules, the influencer will have to follow the steps given below while filing the returns.
Influencer Economy came in tax net
This move of the government is considered important towards bringing the rapidly growing influencer Economy on social media and digital platforms into a formal tax structure. However, what kind of rules will be made in implementing this new system and how the gray area between profession-business will be resolved.